May 30 (Bloomberg) -- A group of Indian ministers agreed to
recommend approval of coal blocks allotted to Reliance Power
Ltd. and a venture of Essar Energy Plc and Hindalco Industries
Ltd. to the country’s cabinet, Coal Secretary Alok Perti said.

The positive recommendation is a step toward ensuring coal
supplies for power plants being built by the companies as Asia’s
second-fastest growing major economy seeks to cut blackouts. A
committee appointed by the environment ministry earlier
recommended conditional approval for the blocks, which are
located in forest areas.

“Clearance for these projects has been long due,” Deven
Choksey, managing director at Mumbai-based K.R. Choksey Shares &
Securities Pvt, said by telephone before the ministers meeting.
“The coal ministry and the environment ministry will have to
work hand in hand if India has to meet its power demand.”

The Chhatrasal block is one of three that will supply coal
for a 3,960-megawatt project at Sasan being built by Reliance
Power, controlled by billionaire Anil Ambani. The Mahan block,
allotted to Essar Energy and Hindalco, will be the source of
fuel for generation plants with a combined capacity of 1,950
megawatts.

Reliance Power plans to start the first, 660-megawatt unit
at Sasan in December. Hindalco, India’s second-largest aluminum
producer, formed a venture with Essar to develop the Mahan coal
mine. Hindalco is planning a smelter in the state and expects to
start mining a year after it gets permission, Managing Director
Debu Bhattacharya said May 8.

Environmental restrictions in India have led to delays in
projects, leading to shortages of commodities, including coal
and iron ore. The country’s annual coal output may rise 28
percent to 715 million tons in the next five years, lagging
behind a 41 percent increase in demand to 981 million tons,
according to Planning Commission estimates.